How to register a UK branch for your Overseas Business in 2021

The Ultimate Guide

Looking to expand your existing business into the UK in 2021? Setting up a UK branch or wholly owned subsidiary can serve as the basis for your company entering the UK and testing the market without the need for significant capital investment. What’s more, UK branch establishment can enable a senior employee or minority shareholder of your overseas business to obtain UK residency and eventual settlement rights via the UK Sole Representative Program, formally known as the Representative of an Overseas Business Visa program.

Find out more about how your overseas company can register a new branch in the UK in 2020, or contact us now for more information.

 

Why choose to set up a new UK branch

Setting up a UK branch can help your company extend its trade footprint in the UK and shorten the sales cycle by increasing perceived credibility and in-country presence. A UK branch functions as an extension of your overseas business, legally speaking.

It can serve as an effective launchpad from which to grow your business in the UK and European markets, and can lend enhanced credibility to your business as a multinational entity. The new UK entity has the freedom to enter into sales and purchase contracts, and can be used to conduct sales, marketing, business development, client service, sourcing and a range of other business activities.

UK branches are subject to lower taxation, given their relatively smaller turnover and lower overheads than regular UK companies. As of August 2020, there are no minimum capitalisation or local job creation requirements associated with either setting up a UK branch or applying for a Sole Rep Visa.

Invoicing and expense claims can also be done via the UK branch, making it a highly appealing option for companies seeking to legally move funds offshore.

How to register a new UK branch

A WORD OF CAUTION: Registering a new company branch in the UK can be a relatively complex process, and it is highly advisable to work with a reputable service provider specialising in the registration of branches for overseas companies. Moreover, and this is critically important, in order to be eligible to apply for the UK Sole Representative Visa, your overseas business is not allowed to have a pre-existing presence in the UK.

It is therefore advisable to first apply for UK residency, and then only to proceed with company formation, bank account opening, recruitment and the renting of office space, should the latter be required. 

COMPANY NAMING & REGISTRATION:

In order to establish a new UK branch, your company must register the business with Companies House, the UK’s registrar of companies. A company name must be selected, and could either be the name of your overseas business, or the alternative brand or name under which it intends to trade in the UK.

It is important to note that the UK branch must be involved in the same type of business activities as the overseas parent company in order to be eligible for the Sole Representative Visa. This fact may inform the decision on naming the new business entity.

You will be expected to submit a duly completed application form, along with several pieces of supporting documentation. You will also need to pay the relevant registration fee. 

SUPPORTING DOCUMENTATION REQUIRED:

In order to register your new branch, you may be required to submit a copy of your latest accounts, translated into English, along with a certified copy of your overseas company’s incorporation documentation and constitutional documents.

Once your branch has successfully been registered, you will be expected to disclose certain business information to Companies House on a continual basis. In addition, you’ll need to maintain a registered company address for a minimum period of 12 years. A virtual office membership subscription can typically be included in your Sole Representative application fees, and your application analyst can advise you on your statutory reporting obligations.

Should we choose a UK Branch or a Subsidiary?

One of the decisions you’ll need to make is whether to register a branch or a subsidiary for your overseas business. In terms of the setup process, there is little difference between these two types of entities. Both types need to be registered with Her Majesty’s Revenue and Customs (HMRC) for VAT, direct ta and PAYE/NIC, if applicable.

However, a branch is easier to wind up than a subsidiary. A failed branch is automatically closed should the business venture fail, whereas closing a subsidiary involves a formal winding-up procedure, striking off, or may require a liquidator to be appointed.

Also, with a subsidiary, only the UK entity’s financial statements have to be filed with Companies House – not those of the parent company.

From a taxation point of view, there are several distinct differences as well. In instances where the UK operations are funded by loans from the parent company overseas, UK subsidiaries enjoy a UK tax deduction for the interested paid on that loan, whereas a branch would not. Furthermore, a UK subsidiary is subject to UK corporation tax on its worldwide profits.

 Choosing the right type of business entity will depend in large part on your overseas company’s structuring and business requirements, and it is highly advisable to seek expert advice from an expert firm specialising in UK company formation, and/or the firm assisting you with your UK Sole Rep Visa application.

To learn more about the process and get your application started, contact us now on, or email hello@solerepresentativevisa.co.uk.

DISCLAIMER: The above information is intended as general information on the topic only, and does not constitute legal advice. By using this website you understand that there is no client or solicitor relationship between your company/you and the website owners or the firms we work with. While every reasonable effort is made to keep the published articles  accurate and updated, UK immigration and company law change rapidly and older articles may not reflect the current status quo. Furthermore, legal advice is only given to contracted clients. Contact us now for more information.